Instant loan app racket busted! Rs 500 cr sent to China via Hawala, cryptocurrency; 22 held for involvement in over 100 such apps

Loan app scam: An instant loan app scam of Rs 500 crore has been busted by Delhi Police`s Special Cell yesterday. The Intelligence Fusion and Strategic Operations (IFSO) busted various modules of instant loan applications having Chinese connections.

In the last two months, 22 people were arrested. The arrested individuals were working on the behest of Chinese nationals. According to a statement of an official on Saturday, the money was being routed to China through the hawala route or crypto-currency.

Hundreds of complaints were received by Delhi Police regarding the instant loan applications. The complaints stated that there are instant loan apps that are disbursing loans at higher rates and even after payment of loan, they are extorting money using the morphed nude pictures, said Deputy Commissioner of Police KPS Malhotra.

"The IFSO took cognizance of the same and started analysing the complaints during which it was found that more than 100 such apps are involved in the loan and extortion racket," Malhotra said.

The police carried out extensive technical analysis after which it was learnt that all the apps were seeking "malicious permissions" from the user.

After obtaining the access permissions, the contacts, chats, messages and images of the user were being uploaded to the servers based in China and Hong Kong. The analysis of the money route also revealed that the money was being routed to China through hawala and crypto-currencies.

"Applications were developed in the garb of loan providing apps. These applications were malicious in nature and seek all permissions from the user. Applications were hosted on Google Play and websites. Users in need of loan downloaded the applications by granting all the permission. Soon after this, the application started uploading the contact lists, chats, images of the user to the servers hosted in China and other parts," the police officer said.

This data was also sold to different private firms.

The customers were receiving calls from different numbers (procured on fake IDs) forcing them to pay more and more by threatening them using the morphed pictures. Due to fear and stigma, the users began paying them money in different bank accounts opened against fake IDs.

The money collected was diverted to specific bank accounts and then sent to China through Hawala or after purchasing cryptocurrencies.

"People who were in dire need of a small loan ranging from Rs 5,000 to 10,000 is being forced to pay even in lakhs," the official claimed.

The financial trial revealed that multiple accounts are being used for getting the amount. In each of the account, transactions of more than Rs 1 crore was being credited daily.

Identities of few Chinese nationals have been confirmed and efforts are being made to trace and arrest them.

"From the analysis of the financial trail and other technical analysis, it was also revealed that Chinese nationals are actively involved in these loan applications scams. Further, after police crackdown, they are shifting their recovery call centres to Pakistan, Nepal and Bangladesh," the police said.

Delhi Police has identified mobile apps through which Rs 500 crore was sent to China via Hawala or by buying Crypto-currency.

Malhotra said that there are more than 100 apps involved in such big extortion racket through mobile loan apps.

These are the apps which used to give small loans. Their actual owners are said to be Chinese nationals.

"Lynda, Akira, Zoya, Kobe Bryant and Luo Rong a.k.a. Xiasi, are the Chinese nationals involved in the matter who were owner of a few apps," said Malhotra, adding three separate cases were lodged in this regard.